America’s Africa Strategy and The Retreating Rhino: A Disconnect Between U.S. Policy and U.S. Business

by Mike Ehrenstein on Mar. 25, 2020

International International Other International  International Trade Government  Government Contract 

Summary: A Disconnect Between U.S. Policy and U.S. Business

U.S. National Security Advisor Ambassador John Bolton recently announced America’s new Africa focused strategy — a strategy which aims to further U.S. interests in Africa by strengthening commercial ties, security assistance and targeted aid on the continent. Unlike the neo-colonial efforts of its geopolitical competitors, the U.S. strategy expressly recognizes that Africa’s stability, prosperity, independence and security — not Africa’s economic or resource subjugation– are in the U.S.’s interest.

As Bolton stated: “We want our economic partners in the region to thrive, prosper, and control their own destinies. In America’s economic dealings, we ask only for reciprocity, never for subservience.”

Bolton articulated America’s clear-eyed strategy as a deliberate and unambiguous challenge to the Chinese and Russian financial and political influence hampering the economic independence of African states.

In September 2018, China pledged another $60 billion in financing for projects in Africa in the form of assistance, investments and loans over the next three years. That’s in addition to the $60 billion China pledged in 2015, and in addition to $20 billion it pledged in 2012.

According to Bolton: “China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands. Its investment ventures are riddled with corruption, and do not meet the same environmental or ethical standards as U.S. developmental programs.”

As a result, Bolton claims China is poised to take over Zambia’s national power and utility companies, and Djibouti’s Doraleh Container Terminal. Similarly, Bolton declared:
“Russia, for its part, is also seeking to increase its influence in the region through corrupt economic dealings. Across the continent, Russia advances its political and economic relationships with little regard for the rule of law or accountable and transparent governance. It continues to sell arms and energy in exchange for votes at the United Nations — votes that keep strongmen in power, undermine peace and security, and run counter to the best interests of the African people.”

The new strategy announced by Bolton recognizes that the predatory practices pursued by China and Russia “stunt economic growth in Africa; threaten the financial independence of African nations; inhibit opportunities for U.S. investment,” and otherwise interfere with U.S. national security interests.

The geopolitical battle lines have been drawn. China and Russia appear intent to subject Africa to further control and manipulation to obtain practically imperial command of its resources. Conversely, the U.S. aims to increase African independence and security through transparency, efficacy, efficiency and growth toward economic self-reliance. The U.S. strategy bets that the long-term best interest of the U.S. and the long-term best interest of African nations are aligned through greater liberty and capitalism.

Unfortunately, America’s lofty geopolitical goals for Africa have not yet sparked substantial additional U.S. competition for projects in Africa. To the contrary, a disconnect between U.S. policy and U.S. business is emerging.

The Wallstreet Journal has reported that the Blackstone Group, the world’s largest private equity firm, pulled back on its plan to invest billions in Africa, and agreed to sell Black Rhino Group — an energy infrastructure developer intended as Blackstone’s principal vehicle for investment in Africa.

Blackstone’s retreat from Black Rhino might be explained by the short time horizon of private equity investments compared to the patient long term ambitions of its Chinese and Russian competitors. On the other hand, Blackstone’s exodus so shortly after the U.S. announced its new Africa policy highlights discordance between American policy goals and American business activity.

Who will control resource rich Africa — China, Russia, America, or the African people? China and Russia have their interests to pursue, as does the U.S. But only the African people can command what is in their best interest.

Article by Michael Ehrenstein

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